Submitted by Taps Coogan on the 23rd of January 2019 to The Sounding Line.

CNBC’s Rick Santelli recently spoke with Bianco Research President Jim Bianco about the slowdown in corporate earnings growth and multitude of geopolitical risks stalking the markets today.

 

Jim Bianco:

“Remember, we rolled off the tax cuts in 2018 which helped with those (earnings) numbers gaining 15%-20%. They’re falling down to around 3.5% year-over-year growth (now), (in a) 2% inflation environment. We are talking about 1.5% real… earnings growth. So if this is a great economy, it’s not showing up in the earnings estimates by the analysts… So far in the first half of 2019, we are going to have rather lackluster growth. Growth, but barely growth… It will put a lid on the stock market. The stock market, to get back to the September highs, I don’t really think it can do that by saying: ‘Hey we are in a 3% earnings world.'”

Rick Santelli:

“But markets like breaking lids cause usually it’s breaking lids that gives you the best or worst returns. So if there’s a lid here in the economy due to a variety of uncertain issues that maybe get remedied in the future, popping through the lid is still possible…”

“…How is all of this going to turn out when we have so many things in March. we have Brexit in March, debt-ceiling in March, we have the China scenario where negotiations have a finite red line in March. There’s a lot of issues in March.”

Jim Bianco:

“And the one issue of the government (closure) continues. If we don’t resolve this into March, and we go into debt ceiling, we go into Brexit, and we go into the trade deadlines, for the technicians that are looking for a retest of the December lows, there you go…”

There is more to the interview, so enjoy it above.

P.S. If you would like to be updated via email when we post a new article, please click here. It’s free and we won’t send any promotional materials.